This appendix to the Handbook establishes Department of Commerce policies and
procedures for timely payment of bills, as well as for the payment of interest and
penalties (if any) when payments are made late. Such late payment penalties apply only
to those contracts covered by the Prompt Payment Act (P. L. 97-177, as amended by P. L.
100-496), as set forth in 31 USC Chapter 39, Prompt Payment.
Section 2.0 Policy Intent and Authority
.01 Intent
Purchase activities should be conducted in a manner that will achieve the lowest
possible cost while maintaining good business relationships with suppliers. To
achieve this objective, organization unit finance offices shall observe the following
principles. Pay bills by the established due date, but not earlier than seven days
prior to the payment due date -- unless earlier payment will result in a discount or
Base payment on receipt of proper Invoices and satisfactory performance of
contract terms. Exception: accelerated payment to a vendor is permitted prior to
verification that merchandise has been received, under certain circumstances, such
as the maximization of rebates. Automatically pay interest and late penalties (if
any) on bills that are paid late and that are subject to the Prompt Payment Act,
without payees requesting these payments.
Take advantage of cash discounts, consistent with applicable Treasury guidelines,
and in compliance with the Prompt Payment Act.
However, the Department of Commerce is still tracking Prompt Pay interest and
penalty payments as well as other related information for internal use and for use in
any other consolidated reports that may be required by law. Bureaus are therefore
asked to continue to maintain Prompt Pay information and a system to assemble and
transmit such information